VALUE OF STERLING

Gisborne Herald, Volume LXVI, Issue 20093, 13 November 1939, Page 6

VALUE OF STERLING

MR. NASH'S QUESTIONS POSITION OF FARMERS NO REAL DIFFERENCE (Per Press Association.) WELLINGTON, this day. “What is this hankering for ‘good English money?’ Is it that Mr. Hamilton wishes to jingle the coins in his pocket, or is the attraction what the coins will buy?" asked the Minister of Finance, the Hon. W. Nash, replying to a claim by the Leader of the Opposition, the Hon. A. Hamilton, that the dairy farmers would have been better off last season without the £3,000,000 extra from the guaranteed price if they had been able to sell their own produce in the United Kingdom.

“It makes not one penny of difference who sells the produce. What matters at the United Kingdom end is the price for which it is sold. The debt service does not cost the country any more because the dairy produce funds are held to the credit of the Government, where formerly they were held to the credit of the New Zealand trading banks. Nor does freight cost more, and every pound sterling of the balance has exactly the same purchasing value, irrespective of its ownership.

Outflow Regulated”

“Unless we were to default on. our interest payments due in Lohdon, the farmers selling their own produce abroad would have no more sterling available for buying imports than is available now. Exchange control does not reduce the available volume of sterling; on the contrary, it conserves the volume by wisely regulating the outflow.

“The Government is not giving away sterling in London. It is paying the country’s debts and then using what is left to buy what the country needs, exactly as the banks have been doing for years and years, with the one difference • that we are working to a plan. Those of his needs which the dairy farmer buys from England cost him just the same now, in terms of butter and cEeese, as they would if he sold his own produce in London and received payment in sterling. At the same time he can buy more of the products of New Zealand industry because he has £3,000,000 with which to pay for them.”